Central Banks

a But the problems faced by Central Banks of Latin America did not end there. Is that the international financial crisis has made domestic financial markets of Latin American countries also see convulsed. Thus, the international financial crisis has had an impact on the region to curb the dynamics of local credit markets. It generates an additional problem for these economies for which the strength of domestic demand could compensate (which depends on domestic credit), at least in part, weak external demand. That is why, before the impact of the crisis in American financial markets, the question inevitably arises: What should central banks in the region? In the immediate term, related to what they are doing the central banks of the region, these are past their focus of attention to the inflationary problems of exchange rate volatility trying to avoid being local currencies continue to depreciate, while not neglecting the first . So the central banks of Argentina, Peru, Mexico and Brazil have come to intervene in currency markets to support the levy. Colombia and Chile have eliminated the daily purchases of foreign exchange.

Colombia said it would start to make control of volatility auctions to sell a quota of U.S. $ 180 million and control of its currency falling. Here it is worth mentioning the importance which is the accumulation of international reserves in Latin American countries, which prevent currency runs or other unwanted effects. a A serious question is how to assess impacts of new developments in the inflationary dynamics of the countries of the region.

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